The Middle East and Africa remain fertile grounds for satellite with the demand for capacity significantly increasing. Yet, with fiber rollouts growing, do these markets still represent a golden opportunity for satellite?
At a time of gloomy reports from the world’s financial markets, the news that mobile telephony is nearing the end of its worldwide period of double-digit growth has barely been noticed. According to the International Telecommunication Union’s (ITU) 2010 world statistics, however, this growth should not have gone under the radar.
Mobile telephony growth rates decreased from more than 20 percent in 2005 and 2006 to around 10 percent in 2009 and 2010 — a drop of more than 10 percentage points in a period of five years.
The global picture of diminishing growth, however, belies regional realities marked by major differences. At the end of 2010, the African region’s mobile telephony penetration rates had reached an estimated 41 percent, compared with 76 percent globally. At the same time, Internet penetration reached 9.6 percent of the population, far behind the world average of 30 percent and the developing world’s country average of 21 percent — Arab states notched 24.9 percent.
When it comes to fixed broadband, Africa lags even further behind with a penetration rate of less than 1 percent illustrating the challenges that persist in increasing access to high-speed, high-capacity Internet access in the region. With a penetration rate of less than 5 percent, Arab states fare better than Africa, though not much better. By comparison, Europe’s penetration rate is about 25 percent.
The silver lining is, because of their current low penetration levels in Information and Communication Technologies (ICTs), regions such as Africa and the Arab States have a significant potential for growth. Conversely, in mature markets such as Western Europe and North America, this potential is markedly smaller. This represents a major opportunity for the satellite sector.
“I see demand for telecom satellite services continuing to outstrip forecasted supply in Africa and the Middle East,” comments John Finney, chief commercial officer, O3b.
There is little doubt that the telecom sector is bubbling in the Middle East and Africa. In 2010 and 2011, new undersea fiber rollouts such as ACE, MainOne, Eassy, Teams Cables, to name a few, triggered significant changes in the market. This new capacity, for example, has ignited the interests of mobile operators to deploy 3G broadband networks in the regions.
“Fiber is making high-speed Internet available and affordable to large parts of Africa,” comments Aidan Baigrie, head of business development, Seacom, a privately owned and operated pan-African ICT enabler. “It is having an impact similar to that of the railways in the 19th century: it is infrastructure that brings development,” he says.